The Tax Publishers2020 TaxPub(DT) 0082 (Bom-HC) : (2021) 433 ITR 0268

INCOME TAX ACT, 1961

Section 271(1)(c)

Where AO had issued the notice of penalty without specifying the grounds on which the same was imposed, imposition of penalty was unjustified, because this being a mandatory requirement could not be construed as a mere technical error.

Penalty under section 271(1)(c) - Validity - Notice issued by AO without specifying grounds of penalty -

AO had imposed penalty under section 271(1)(c) on assessee, who assailed the same contending that notice issued under section 274 did not specify the grounds on which penalty was imposed i.e. whether for concealment of income or for furnishing inaccurate particulars. Revenue rejected contention of assessee holding that penalty could not be deleted merely because of a technical error in the show cause notice. Tribunal deleted the penalty. Held: CIT(A) as well as ITAT have categorically held that in the present case, there is no record of satisfaction by AO that there was any concealment of income or that any inaccurate particulars were furnished by assessee. Notice issued to assessee must indicate as to whether AO was satisfied that the case of the assessee involves concealment of particulars of income or furnishing of inaccurate particulars of income or both, with clarity. Therefore there was no proper record of satisfaction or proper application of mind in matter of initiation of penalty proceedings.

REFERRED : MAK Data P. Ltd. v. CIT-II 2013 (38) Taxman.com 448 (SC) : 2013 TaxPub(DT) 2358 (SC) PCIT v. Goa Coastal Resorts & Recreation Pvt. Ltd. [Tax Appeal No. 24 OF 2019, DT. 11-11-2019] PCIT v. New Era Sova Mine 2019 SCC Online Bom 1032 and CIT-11 v. Samson Perinchery (2017) 392 ITR 4 (Bom) : 2017 TaxPub(DT) 0672 (Bom-HC)

FAVOUR : In assessee's favour

A.Y. :



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